Engaging Employees: The Economics of Micro Ingenuity

BY JOHN M. BERNARD

Wouldn’t it be a dream if every employee could add $13,000 to the bottom line of your business each and every year? No need to dream because research shows that’s exactly what happens when an employee shifts from being disengaged to engaged.

Every employee has ideas for taking waste out of their routine work. Some frontline workers see simple things that can be done to improve the customer experience and others have easy-to-implement ideas that can grow revenue.

In Business at the Speed of Now I demonstrate the economics of small ideas. A simple example is that if an employee has an idea, and that idea removes a small amount of waste from a repetitive process, it doesn’t take much of an idea to save $1,000 annually. So, using simple math, if you have 100 employees and each saves $1,000 by implementing one equivalent improvement idea each, your business adds $100,000 to its bottom line.

Now, keeping the same math in mind, if each of your 100 employees implements 10 ideas annually and each saves $1,000 then your business will enjoy $1 million more on the bottom line every year.  This is how the economics of micro ingenuity pays off.

This may seem like a wild dream, but not when you realize that Toyota’s employees on average have been implementing 70 ideas annually for more than 30 years, according to Toyota expert and author Norm Bodek. At the same time General Motors implemented one idea per employee every seven years. Yes, you read that right. And this fact reveals why Toyota has grown at a much faster rate than GM, which was once the most powerful company in the world.

Toyota is a NOW company, General Motors lives in the THEN world.

Micro ingenuity is a powerful reality, and in my experience is the one true sustainable competitive advantage a company can build. But how does Toyota do it?

Next week I’ll share how Toyota focuses employee ideas on the practical reality of their daily work – the work employees can and should control.